HOUSINGNEWS REPORT
THE PROMISE AND PITFALLS OF ACCESSORY DWELLING UNITS AS AN AFFORDABLE HOUSING PANACEA
“I’ve got all these great lots, we’re not maximizing density and it really was looking like the market was saying this was too much money.” So Grubb pivoted his strategy and started focusing on building smaller complexes of up to 15 units, depending on the lot size. “I think stacked development makes sense,” he said. “We’re doing three- story, four units on each level. I’m trying to get as large of units as possible … nobody wants to live in IKEA. … The goal is just to make smaller and smaller pieces and make it more affordable. “Put in a little less house and a little more building in there; we could still hit our numbers,” he continued. “You’ve got to be able to pivot.” Densify or Die? That evolution from fix-and-flipper to full-fledged real estate developer is a common trajectory in recent years, according to Ross Hamilton, CEO with Connected Investors, an online community for real estate investors. “A lot of fix-and-flip real estate investors are going to become builders. …not necessarily because they want to but out of necessity,” Hamilton said. “There is a lot less competition to get a lot and to build on it. And the profits are a lot more predictable.”
“A lot of fix-and-flip real estate investors are going to become builders. …not necessarily because they want to but out of necessity. There is a lot less competition to get a lot and to build on it. And the profits are a lot more predictable.”
ROSS HAMILTON CEO, CONNECTED INVESTORS
looking to cash out of their investment properties there started contacting him.
development. But he warned that thinking could lead to harmful long- term impacts for the region. “At what point do we become too expensive? At what point do companies say I can create my widget in Boise, Idaho, where it is significantly cheaper,” he cautioned. “Both from a demand standpoint as well as from a demographic standpoint, zoning should not be the same as it was 30 to 40 years ago. … The world is changing.”
“We started getting 1031 money contacting us like crazy,” he said. “They are able to buy a lot more here than they are in other areas. Maybe I roll out of a duplex in LA or San Francisco. I have enough money from that rollout that I can buy a new construction multi-unit building that I’m building (in Portland).” Gardner said “classic NIMBYism thinking” is keeping Seattle from a bigger push toward denser housing
A bonus to Grubb’s new strategy: investors in higher-priced markets
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MARCH 2018 | ATTOM DATA SOLUTIONS
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